The iPad was created by Steve Jobs, the CEO of the Apple Company. The origin of the idea of iPad was then Jobs’ vision of a multi-touch display, a notch up from the tablet computers, being smaller and lighter than the complimenting smartphones and laptops. IPad came into market on 3rd April 2010. A 16GB iPad will cost $499, 32GB will be $599, and the 64GB version will go for $699. But prices could change if the company is not attracting as many customers as anticipated. Apple executives said “Apple indicated it would consider lowering prices if initial demand appears to be slow.” Through our economics knowledge, we understand that the price of iPad depends on the demand and supply of the goods. Should quantity demanded exceeds the quantity supplied, this causes an upwards pressure of both the price and supply to achieve an equilibrium point. On the other hand, should the quantity supplied exceeds the quantity demanded, it will cause a downwards pressure to the price and supply to achieve the equilibrium point. Based on research, it was shown that Apple started accepting pre-orders of the iPad and from the pre-orders which were taken, it was shown that there was a huge number of people who were interested in purchasing the iPad and this implies high demand. Due to this high demand, it causes the price of iPad to increase. Due to this pre-order, Apple is hence able to produce the ideal number of iPad for sale in the market and thus the quantity supplied does not exceed the quantity demanded. There are many related or associated products for iPad. Of which are the apple wireless keyboard which uses Bluetooth technology to connect to the iPad, an Apple iPad keyboard dock which is a combination of a keyboard and a dock for charging the iPad and an Apple iPad camera connection kit to import photos and videos from a digital camera.
Shortage arises when quantity demanded exceeds quantity supplied, not enough to just say high demand... be more specific. Ifyou mention price is determind by market forces, what about the effect on supply? Para 2:What do you learn about all these products? How are the products related? what is the relationship?
Economics Report B
As technology advances and more companies are producing better or similar products such as Samsung Galaxy Tab a substitute of iPad in the market. Since Apple Co. is aware of strong competition, they will set a lower pricing for the iPad to attract consumers as the price of Samsung Galaxy Tab is much lower than iPad. However, as Apple Co. started accepting pre-orders from consumers on the 12th of March 2010, the outstanding figures of the preorder have suggested the high demand. Therefore the price of iPad remains high.
To counteract, Apple modified the pricing of the iPad which may attract consumers and increase revenue. Their marketing strategies emphasize on the fact of how their product are more superior than substitutes. As more people are aware of iPad and are interested in getting it, there will be an increase in quantity demanded thus increasing the price. Since producers are profit driven, they will increase the supply.
However, abnormal circumstances like the Japan earthquake caused the supply to drop as the production of certain components of the iPad has stopped. Infrastructures like factories may be destroyed, decreasing the supply, increasing the price of iPad. However, since there is a demand for iPad, people are willing to pay higher prices for iPad.
With the advancement of technology, producers use technology for manufacturing, reducing human labour and decreasing cost of production. Hence with the same cost of product and lower unit cost of production, there will be higher profit per unit. Revenue increases.
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Consumer’s taste and preference affect demand of iPad. As recent developments like liquid crystal display technology thrive followed by an increase in the substitutes of iPads, consumers will be exposed to an array of substitutes and may not choose iPad over substitutes like Samsung Galazy Tab. This will cause a drop in demand, hence supply will increase and eventually the price of iPad drops to attract consumers, being less price elastic. This situation works vice versa.
Prices of iPad affect the quantity demanded and finally the marketing decision. When prices increase, quantity demanded will decrease. Thus, the supply available in the market increases. Then the marketing decision will be to advertise and increase the publicity of the iPad to attract buyers. This marketing decision works vice versa.
In addition, the pricing of iPad can be affected by the willingness and ability of the consumers to purchase the good. As economy growth is being observed in the table below:
Growth in percent
2007
2008
2009
2010
Global economies
5.2
3.0
0.6
4.2
Advanced economies
0.5
-3.2
2.3
Emerging and Developing economies
6.1
2.4
6.3
If consumers have higher income than before, they will have greater purchasing power causing an increase in demand for iPad as consumers will have a greater consumption of superior good (iPad), thus prices increase.
The simultaneous interaction between consumers and producers results in equilibrium price and quantity being achieved. As producers aim to maximise their profits earned, they will market their products as much as they can through media, etc. When quantity demanded increases till exceeding quantity supplied, shortage occurs. An upward pressure will be put on the price. When there is a large increase in quantity demanded, the price will increase by a large extent, and vice versa.
Para 1: This paragraph is about Pre orders for iPad but the details is a bit too long. You don;t need so much detail, just enough for you to explain your point. Is this one of the recent development?
Para 2: Instead of using "higher" when describing demand, price, use words like increase. Clearer understanding when analysing. Analysis is okay. If so, is there anything the producers can do in terms of pricing and marketing decision. Pricing and marketing decisions are made AFTER equilibrium price and quantoty is achieved.
A challenge: will my price change to a large extent or smaller extent if the demand of iPad increases.
Para 3:What is the recent development here? increase in supply is due to increase in price. Price increased when demand increase. Producer's objective is to maximize profit, not to meet the consumer's demand. It is just that if producer respond to consumers' demand, they will also earn higher profit.
Para 4: Availablility of substitutes affects PED, not demand. Demand of iPad change because of other demand factors. can you identify it? If so, what can the Apple do to counteract this problem in terms of pricing and marketing strategy.
Para 5: Similar to the above point on choice and preference.
Para 6: how do the consumer realize the benefits? Who told them? What kind of strategy is this?
Main objective of producers in changing their supply is so as to reap profit. If prices decrease, profit level would fall, producers would supply less.
The iPad was created by Steve Jobs, the CEO of the Apple Company. The origin of the idea of iPad was then Jobs’ vision of a multi-touch display, a notch up from the tablet computers, being smaller and lighter than the complimenting smartphones and laptops. IPad came into market on 3rd April 2010.
A 16GB iPad will cost $499, 32GB will be $599, and the 64GB version will go for $699. But prices could change if the company is not attracting as many customers as anticipated. Apple executives said “Apple indicated it would consider lowering prices if initial demand appears to be slow.” Through our economics knowledge, we understand that the price of iPad depends on the demand and supply of the goods.
Should quantity demanded exceeds the quantity supplied, this causes an upwards pressure of both the price and supply to achieve an equilibrium point. On the other hand, should the quantity supplied exceeds the quantity demanded, it will cause a downwards pressure to the price and supply to achieve the equilibrium point.
Based on research, it was shown that Apple started accepting pre-orders of the iPad and from the pre-orders which were taken, it was shown that there was a huge number of people who were interested in purchasing the iPad and this implies high demand. Due to this high demand, it causes the price of iPad to increase. Due to this pre-order, Apple is hence able to produce the ideal number of iPad for sale in the market and thus the quantity supplied does not exceed the quantity demanded.
There are many related or associated products for iPad. Of which are the apple wireless keyboard which uses Bluetooth technology to connect to the iPad, an Apple iPad keyboard dock which is a combination of a keyboard and a dock for charging the iPad and an Apple iPad camera connection kit to import photos and videos from a digital camera.
Website:
Http://ipad.org/tag/ipadhistory/
http://www.csmonitor.com/Innovation/Horizons/2010/0127/How-much-does-the-Apple-iPad-cost-Same-as-the-original-iPhone
http://en.wikipedia.org/wiki/Steve_Jobs
http://en.wikipedia.org/wiki/iPad
Para 2:What do you learn about all these products? How are the products related? what is the relationship?
As technology advances and more companies are producing better or similar products such as Samsung Galaxy Tab a substitute of iPad in the market. Since Apple Co. is aware of strong competition, they will set a lower pricing for the iPad to attract consumers as the price of Samsung Galaxy Tab is much lower than iPad. However, as Apple Co. started accepting pre-orders from consumers on the 12th of March 2010, the outstanding figures of the preorder have suggested the high demand. Therefore the price of iPad remains high.
To counteract, Apple modified the pricing of the iPad which may attract consumers and increase revenue. Their marketing strategies emphasize on the fact of how their product are more superior than substitutes.
As more people are aware of iPad and are interested in getting it, there will be an increase in quantity demanded thus increasing the price. Since producers are profit driven, they will increase the supply.
However, abnormal circumstances like the Japan earthquake caused the supply to drop as the production of certain components of the iPad has stopped. Infrastructures like factories may be destroyed, decreasing the supply, increasing the price of iPad. However, since there is a demand for iPad, people are willing to pay higher prices for iPad.
With the advancement of technology, producers use technology for manufacturing, reducing human labour and decreasing cost of production. Hence with the same cost of product and lower unit cost of production, there will be higher profit per unit. Revenue increases.
---
Consumer’s taste and preference affect demand of iPad. As recent developments like liquid crystal display technology thrive followed by an increase in the substitutes of iPads, consumers will be exposed to an array of substitutes and may not choose iPad over substitutes like Samsung Galazy Tab. This will cause a drop in demand, hence supply will increase and eventually the price of iPad drops to attract consumers, being less price elastic. This situation works vice versa.
Prices of iPad affect the quantity demanded and finally the marketing decision. When prices increase, quantity demanded will decrease. Thus, the supply available in the market increases. Then the marketing decision will be to advertise and increase the publicity of the iPad to attract buyers. This marketing decision works vice versa.
In addition, the pricing of iPad can be affected by the willingness and ability of the consumers to purchase the good. As economy growth is being observed in the table below:
The simultaneous interaction between consumers and producers results in equilibrium price and quantity being achieved. As producers aim to maximise their profits earned, they will market their products as much as they can through media, etc. When quantity demanded increases till exceeding quantity supplied, shortage occurs. An upward pressure will be put on the price. When there is a large increase in quantity demanded, the price will increase by a large extent, and vice versa.
Para 2: Instead of using "higher" when describing demand, price, use words like increase. Clearer understanding when analysing. Analysis is okay. If so, is there anything the producers can do in terms of pricing and marketing decision. Pricing and marketing decisions are made AFTER equilibrium price and quantoty is achieved.
A challenge: will my price change to a large extent or smaller extent if the demand of iPad increases.
Para 3:What is the recent development here? increase in supply is due to increase in price. Price increased when demand increase. Producer's objective is to maximize profit, not to meet the consumer's demand. It is just that if producer respond to consumers' demand, they will also earn higher profit.
Para 4: Availablility of substitutes affects PED, not demand. Demand of iPad change because of other demand factors. can you identify it? If so, what can the Apple do to counteract this problem in terms of pricing and marketing strategy.
Para 5: Similar to the above point on choice and preference.
Para 6: how do the consumer realize the benefits? Who told them? What kind of strategy is this?
Main objective of producers in changing their supply is so as to reap profit. If prices decrease, profit level would fall, producers would supply less.
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Http://ipad.org/tag/ipadhistory/
http://www.csmonitor.com/Innovation/Horizons/2010/0127/How-much-does-the-Apple-iPad-cost-Same-as-the-original-iPhone
http://en.wikipedia.org/wiki/Steve_Jobs
http://en.wikipedia.org/wiki/iPad
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